[CCWG-Accountability] Regarding Non-profit and public-benefit legal structure
Eric Brunner-Williams
ebw at abenaki.wabanaki.net
Wed Jan 7 19:49:52 UTC 2015
On 1/7/15 11:08 AM, Steve DelBianco wrote:
> Some clarifications about the Member concept, as described on the Work
> Area 2 inventory
> <https://community.icann.org/pages/viewpage.action?pageId=51416471>:
Steve,
Thank you for reference to the WS2 collection -- as I've not followed
WS2 I've no idea which of the items referencing "members" is final and
ready for reference to the entire WG for consideration. In any case ...
>
>
> Members are not outside of ICANN — they are designated by their
> respective AC/SO/Constituencies. So not sure there is much risk
> that a majority of these Members could be captured.
>
I'm glad you recognize that, assuming several possible models for
"membership", some will, from time to time, be captured by the parties
with substantial material interest in the corporation's momentary and
long-term policies and governance, though perhaps not a majority.
Personally I would not fixate on "majority", as policy decision making
has been, and may continue to be, by groups of interests, for which much
less than "majority capture" may be sufficient to determine outcomes.
In what follows (below) shouldn't these "member" references be "proposed
members", with a reference to a specific membership proposal somewhere
in the WS2 work product? I'd like to know what "member" means, and I
expect that what is needed for each notion of "member" is the proposed
Bylaws language for that proposed notion of "member" and the rights and
duties associated.
Best,
Eric Brunner-Williams
Eugene, Oregon
> Members would be given only these enumerated powers:
>
> Appoint members of Affirmation Review teams
> Review [and perhaps reverse] any board decision. Non-approval
> would send decision back to bottom-up policy development process.
> Approve proposed changes to ICANN Bylaws or Articles of
> Incorporation.
> Approve annual proposed budget
>
>
> Members could _not_ re-write contracts or budgets or bylaws. If
> a bottom-up consensus process generated a bylaws change that was
> rejected by the board, the Members could reverse that decision,
> however.
>
>
> Steve DelBianco
>
> From: Greg Shatan <gregshatanipc at gmail.com
> <mailto:gregshatanipc at gmail.com>>
> Date: Wednesday, January 7, 2015 at 12:45 PM
> Cc: "accountability-cross-community at icann.org
> <mailto:accountability-cross-community at icann.org>"
> <accountability-cross-community at icann.org
> <mailto:accountability-cross-community at icann.org>>
> Subject: Re: [CCWG-Accountability] Regarding Non-profit and
> public-benefit legal structure
>
> I would not rush to the conclusion that a membership group is per se
> prone to capture. A poorly designed membership group, yes. The devil
> is in the details -- who are the members? if they are individuals, who
> do they represent? how do they act? when can they act, and how
> quickly? how many of them are there? what are their powers? who is
> excluded? are there classes of members? is voting weighted?
>
> Also, I'm not sure if (or why) the community accountability mechanism
> needs to be "outside" (depending on what that means). Members in a
> membership corporation are not really outside, unless I am not getting
> the sense of the word as used here.
>
> As for the dispute resolution mechanism, that will depend on the other
> two factors (among other things). If the members have the "last word"
> on something, and the board fails to act, binding arbitration (or
> litigation) would be a reasonable step (although some escalation
> mechanisms might be appropriate before getting there).
>
> Greg Shatan
>
>
> On Wed, Jan 7, 2015 at 10:37 AM, Paul Rosenzweig
> <paul.rosenzweig at redbranchconsulting.com
> <mailto:paul.rosenzweig at redbranchconsulting.com>> wrote:
>
> I think that the potential for capture of the outside member group
> is the reason that the accountability system probably needs to be
> linked to an independent judicial/arbitral function to resolve
> disputes. [Of course that institution, too, could be captured …
> but at some point we have to end the “who guards the guardians?”
> question]. And that, in turn emphasizes why it is necessary as
> part of the transition to define the Board’s/ICANN’s scope of
> authority. A judicial/arbitral function can only resolve disputes
> and cabin capture/abuse if it has an articulated standard against
> which to measure the dispute. In the absence of such pre-existing
> guidance the judiciary/arbiter is simply substituting his/her/its
> own judgment for the Board and the Community, which is not a good
> thing.
>
> Hence the bottom line: We need a) an outside accountability
> mechanism representing the community; b) an independent dispute
> resolution mechanism; and c) clearly articulated standards against
> which to measure and resolve any dispute
>
> Paul
>
> *From:*Mathieu Weill [mailto:mathieu.weill at afnic.fr
> <mailto:mathieu.weill at afnic.fr>]
> *Sent:* Wednesday, January 7, 2015 9:04 AM
> *To:* accountability-cross-community at icann.org
> <mailto:accountability-cross-community at icann.org>
> *Subject:* Re: [CCWG-Accountability] Regarding Non-profit and
> public-benefit legal structure
>
> Dear Colleagues,
>
> Many thanks for this very valuable discussion.
>
> While it confirms that our initial orientation towards the ability
> to, somehow, oversee the Board, is relevant and worth exploring,
> the latest comments (regarding risk of capture) highlight that we
> should also anticipate on the accountability of the overseeing
> mechanism itself.
>
> If "the community" (through a mechanism yet to be determined)
> oversees Board and staff, can we ensure all stakeholders,
> especially those who are less familiar with Icann, that "the
> community", in turn, is accountable (ie has the relevant
> independent checks and balances, review and redress mechanisms) ?
> A significant challenge, but I'm confident our group can address
> that.
>
> This aspect might, however, need to be addressed in our definition
> of WS1, if there is agreement that is a necessary element for the
> transition to take place.
>
> Best,
> Mathieu
>
>
>
> Le 07/01/2015 09:07, Dr Eberhard W Lisse a écrit :
>
> I am not interested much in the details, interesting as they
> are :-)-O, but would like to pick up on Bruce's last
> paragraph, because in my view, the "membership supervision" is
> not going to help much as it is prone to capture, quite the
> opposite of the accountability we want.
>
> greetings, el
>
>
> Sent from Dr Lisse's iPad mini
>
>
> On Jan 7, 2015, at 02:40, Greg Shatan <gregshatanipc at gmail.com
> <mailto:gregshatanipc at gmail.com>> wrote:
>
> What Bruce has set forth is close to correct. However, I
> can't help but do a little legal nit-picking.
>
> "Public benefit corporation" is a term used in California
> (among other places) as a term for non-profit corporations
> generally. (In New York State, we use the term
> "not-for-profit corporation" to mean basically the same
> thing as a California "public benefit corporation" (and we
> use the term "public benefit corporation" to mean
> something quite different -- a quasi-public corporation
> like the Metropolitan Transport Authority).) California
> public benefit corporations are not really "chartered by
> the state" (though New York ones like the MTA are
> chartered by the state). [Wikipedia isn't always a great
> source....]
>
> In California, public benefit corporations may be created
> with or without members, or may convert from member to
> non-member and vice versa. However, a public benefit
> corporation with members is still a public benefit
> corporation.
>
> (California also has "mutual benefit corporations" which
> are non-profit but never charitable (and are also not
> tax-exempt). Mutual benefit corporations are run for the
> benefit of their members, and not for the benefit of the
> general public.)
>
> The term "member" can also be used to mean people (or
> organizations) who aren't really members. For instance,
> when you become a "member" of a museum, you are not
> becoming a member of the corporation (i.e., what some in
> ICANN-land have termed a "statutory member"). These
> non-statutory "memberships" are more for marketing
> purposes and have no governance role. "Statutory members"
> on the other hand, have a role in governance (which can
> vary markedly depending on the by-laws of the particular
> corporation.
>
> Hope this helps.
>
> Best regards,
>
> Greg Shatan
>
> (Speaking for myself, and not giving legal advice as I am
> not a member of the California Bar)
>
> On Tue, Jan 6, 2015 at 6:54 PM, Bruce Tonkin
> <Bruce.Tonkin at melbourneit.com.au
> <mailto:Bruce.Tonkin at melbourneit.com.au>> wrote:
>
> Hello Phil,
>
>
> >> I would envisage the Board having to be
> compliance with all Corporate Governance Codes
> specific to Companies Law in the country of
> incorporation, subject to a community consensus
> override. But what is its corporate status - not for
> profit or for profit - as different codes would apply ?
>
> The legal status of ICANN is as specified in its
> articles of incorporation:
>
> https://www.icann.org/resources/pages/articles-2012-02-25-en
>
> "This Corporation is a non-profit public benefit
> corporation and is not organized for the private gain
> of any person. It is organized under the California
> Non-profit Public Benefit Corporation Law for
> charitable and public purposes. The Corporation is
> organized, and will be operated, exclusively for
> charitable, educational, and scientific purposes
> within the meaning of § 501 (c)(3) of the Internal
> Revenue Code of 1986, as amended (the "Code"), or the
> corresponding provision of any future United States
> tax code. Any reference in these Articles to the Code
> shall include the corresponding provisions of any
> further United States tax code."
>
> Also from:
>
> http://en.wikipedia.org/wiki/Public-benefit_nonprofit_corporation
>
> "A public-benefit non-profit corporation is a type of
> non-profit corporation chartered by a state
> government, and organized primarily or exclusively for
> social, educational, recreational or charitable
> purposes by like-minded citizens. Public-benefit
> nonprofit corporations are distinct in the law from
> mutual-benefit nonprofit corporations in that they are
> organized for the general public benefit, rather than
> for the interest of its members."
>
> I believe it was deliberately set up as public benefit
> rather than a member organization - to avoid the
> situation where the members become limited to say gTLD
> registries and registrars and hence it ends up
> operating primarily for the benefit of the domain name
> registration industry.
>
> Any move away from a public-benefit corporation to a
> membership corporation - would need to carefully
> consider how to ensure that the members are reflective
> of the broader Internet community and don't become
> limited to a few members as interest in "ICANN" drops
> over time. I.e. a failure scenario of membership
> organisation is what happens to the membership base
> over time and how it can be protected from capture.
> I have seen some membership based ccTLDs get into
> problems when their membership becomes dominated by
> domain name investors for example.
>
> Regards,
> Bruce Tonkin
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> --
>
> *****************************
>
> Mathieu WEILL
>
> AFNIC - directeur général
>
> Tél:+33 1 39 30 83 06 <tel:%2B33%201%2039%2030%2083%2006>
>
> mathieu.weill at afnic.fr <mailto:mathieu.weill at afnic.fr>
>
> Twitter : @mathieuweill
>
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